Happy Birthday Marie Curie!
08 Nov 2014 Leave a comment
in discrimination, gender Tags: gender, Marie Curie, sex discrimination, The Great Fact
James Tobin on limiting the domain of inequality
08 Nov 2014 Leave a comment
in applied welfare economics, income redistribution, Public Choice, welfare reform Tags: James Tobin, negative income tax, poverty and inequality, welfare reform
How to argue against the minimum wage when genuinely trying to argue for it – OECD edition
08 Nov 2014 Leave a comment
in labour economics, minimum wage, Public Choice Tags: living wage, minimum wage, social cost of the minimum wage, The fatal conceit, The pretence to knowledge
The 2014 OECD employment outlook argued for modest minimum wage increases while at the same time setting out all the steps necessary to manage the unintended consequences of minimum wage regulation:
Mandatory minimum wages, which now exist – or are being implemented – in 26 OECD countries and a number of emerging economies, can help underpin the wages of low-paid workers.
Evidence suggests that, when set at an appropriate level, minimum wages tend to have only a small adverse effect on employment.
Sensible minimum-wage design includes: taking account of differences by region according to the average income level, as well as by age in experience and productivity; ensuring that the level and adjustments of the minimum wage involve independent commissions; and reducing social security contributions to lower non-wage labour costs at the minimum wage (Emphasis mine).
George Stigler made very similar criticisms of the impracticality of a single minimum wage in 1946:
If an employer has a significant degree of control over the wage rate he pays for a given quality of labour, a skilfully-set minimum wage may increase his employment and wage rate and, because the wage is brought closer to the value of the marginal product, at the same time increase aggregate output…
This arithmetic is quite valid but it is not very relevant to the question of a national minimum wage. The minimum wage which achieves these desirable ends has several requisites:
1. It must be chosen correctly… the optimum minimum wage can be set only if the demand and supply schedules are known over a considerable range…
2. The optimum wage varies with occupation (and, within an occupation, with the quality of worker).
3. The optimum wage varies among firms (and plants).
4. The optimum wage varies, often rapidly, through time.
A uniform national minimum wage, infrequently changed, is wholly unsuited to these diversities of conditions
Modest minimum wage increases must varying in their modesty by individual worker quality, occupation, region, firm and plant and the extent to which this modesty can be excessively immodest can change rapidly through time. Little wonder that the OECD refers to minimum wage regulation as a careful balancing act.
In sum, to avoid throwing a good number of low paid, low skilled workers onto the scrapheap of society for the sake of their more employable co-workers, the minimum wage pretty much be set separately for each individual worker. The labour market does that now.
Fraudster Alan Knight jailed for £40,000 scam after pretending to be in a coma for two years | Daily Mail Online
08 Nov 2014 Leave a comment
in economics of crime, welfare reform Tags: crime and punishment
doctors spotted Knight – pictured with wife, Helen – eating, wiping his face and writing while he was in hospital for observations
The slums of Jebson Pl – down and out in New Zealand includes Sky TV
08 Nov 2014 Leave a comment
in poverty and inequality, welfare reform Tags: poverty and inequality, The Great Erichment, welfare reform
via Whale Oil Beef Hooked and waikato-times
Working for Families and work incentives
08 Nov 2014 Leave a comment
in labour economics, labour supply, politics - New Zealand, public economics, taxation, welfare reform Tags: effective marginal tax rates, tax – welfare system interactions
There are 3.38 million individual taxpayers. Of these, about 120,000 (3.4 percent) face EMTRs over 60%, 120,000 (3.4 percent) face EMTRs between 50% and 60%, and 160,000 (4.5 percent) face EMTRs between 40% and 50%. Slightly more than 88 percent of taxpayers face EMTRs below 40%.
HT: New-Zealand-tax-system-and-how-it-compares-internationally
Wellington City Council builds inner city children’s sandpit next to red-stickered buildings marked for collapse in next earthquake
07 Nov 2014 Leave a comment
in economics of bureaucracy, health and safety, politics - New Zealand, Public Choice Tags: economics of natural disasters, expressive voting, health and safety, Taxpayers Union, Wellington City Council
That Catcalling Video and Why “Research Methods” is such an Exciting Topic (Really!) — The Message — Medium
07 Nov 2014 1 Comment
in discrimination, economics of media and culture, gender, labour economics Tags: research design, sex discrimination, sexual harassment
The filmmakers claim to have shot this video while walking the streets of Manhattan for 10 hours, but over half of the shots in the video are actually taken from just one street, namely 125th St. in Harlem.
Occupy Wall Street protesters didn’t like what they found when they actually met the bottom 1%
06 Nov 2014 Leave a comment
in labour economics, poverty and inequality, welfare reform Tags: bottom 1%, economics of personality traits, Occupy Wall Street, poverty and inequality, top 1%
The Occupy Wall Street protesters had free food provided by kitchens staffed by volunteers.
These self appointed representatives of the bottom 99% didn’t appreciate brushing shoulders with the bottom 1 percent of the social stratum:
The Occupy Wall Street volunteer kitchen staff launched a “counter” revolution yesterday — because they’re angry about working 18-hour days to provide food for “professional homeless” people and ex-cons masquerading as protesters.
For three days beginning tomorrow, the cooks will serve only brown rice and other spartan grub instead of the usual menu of organic chicken and vegetables, spaghetti bolognese, and roasted beet and sheep’s-milk-cheese salad.
They will also provide directions to local soup kitchens for the vagrants, criminals and other freeloaders who have been descending on Zuccotti Park in increasing numbers every day.
To show they mean business, the kitchen staff refused to serve any food for two hours yesterday in order to meet with organizers to air their grievances, sources said…
Overall security at the park had deteriorated to the point where many frightened female protesters had abandoned the increasingly out-of-control occupation, security- team members said.
Bryan Caplan on the pathologies of poverty
05 Nov 2014 Leave a comment
in labour economics, poverty and inequality, welfare reform Tags: Bryan Caplan, do gooders, Occupy Wall Street, poverty and inequality, top 1%
Bryan Caplan drew up a nice list of factors that contribute to poverty
- alcoholism: Alcohol costs money, interferes with your ability to work, and leads to expensive reckless behaviour.
- drug addiction: Like alcohol, but more expensive, and likely to eventually lead to legal troubles you’re too poor to buy your way out of.
- single parenthood: Raising a child takes a lot of effort and a lot of money. One poor person rarely has enough resources to comfortably provide this combination of effort and money.
- unprotected sex: Unprotected sex quickly leads to single parenthood. See above.
- dropping out of high school: High school drop-outs earn much lower wages than graduates. Kids from rich families may be able to afford this sacrifice, but kids from poor families can’t.
- being single: Getting married lets couples avoid a lot of wasteful duplication of household expenses. These savings may not mean much to the rich, but they make a huge difference for the poor.
- non-remunerative crime: Drunk driving and bar fights don’t pay. In fact, they have high expected medical and legal expenses. The rich might be able to afford these costs. The poor can’t.
Caplan argues that there is an undeserving poor if they fail to follow the following reasonable steps to avoid poverty and hardship:
- Work full-time, even if the best job you can get isn’t fun.
- Spend your money on food and shelter before getting cigarettes and cable t.v.
- Use contraception if you can’t afford a child
The Feed the Kids Bill still leaves their parents to go hungry!
05 Nov 2014 Leave a comment
in applied price theory, economics of education, politics - New Zealand, poverty and inequality, welfare reform Tags: Heartless Left, Leftover Left, school breakfast programmes
The Feed the Kids Bill that has been reintroduced into the new New Zealand Parliament still contains no provision to feed the parents who are too poor to make their children breakfast.
Why are these hungry parents not invited for breakfast as well? No parent would have breakfast if their children was to go hungry. Both the parent and child must have gone hungry that morning, perhaps morning after morning. There is no other charitable explanation.
The Bill aims to set up government funded breakfast and lunch programmes in all decile 1-2 schools. The cost is $100 million a year – including food, staffing, administration, monitoring and evaluation.
Lindsay Mitchell was on the money when she wrote:
Even parents reliant on a benefit are paid enough to provide some fruit and modest sandwiches daily.
An inability to do so is a symptom of a greater problem requiring scrutiny – for the sake of their child.
“The ‘income management’ regime provides a response to genuinely hungry children.
It may interest you that even Labour advocated for extended income management in its election manifesto.
Their 2014 ‘Social Development’ policy paper proposed, “…allow[ing] income management to be used as a tool by social agencies where there are known child protection issues and it is considered in the best interests of the child, especially where there are gambling, drug and alcohol issues involved.”
Hungry children is a child protection issue. Parents who fail to feed their children should come to the attention of the child protection authorities. Those on the benefit should be subject to income management because they clearly are spending their money elsewhere.
On the Left, there is a refusal to discuss the role of addiction and incompetent parenting in child poverty. The 2014 election manifesto of the Labour Party is a welcome departure from that tradition of denial.
The reversing gender gap: why women choose not to be scientists, engineers and IT professionals
05 Nov 2014 4 Comments
in discrimination, economics of education, gender, human capital, labour economics, labour supply, occupational choice Tags: do gooders, occupation choice, sex discrimination, The fatal conceit, The pretence to knowledge
Concerns about the lack of women undertaking careers in science and engineering are based on one simple false premise: that science and engineering are the most prestigious choices available to women with great ability in maths and science at high school.
We themed our roundup this week: 5 Plots on Gender You Have to See blog.plot.ly/post/976775676… @randal_olson @katy_milkman http://t.co/B5suLXIPkz—
plotly (@plotlygraphs) September 16, 2014
If relatively more prestigious career options are open to women who also happen to qualify for science and engineering, women will be underrepresented in science and engineering simply because they have better career options than the men who become scientists and engineers.
In New Zealand, just as many women as men qualify for science and engineering and the IT degrees. Not as many women who have qualified take up this option simply because they also qualify for medicine and law in greater numbers than the men who happen to qualify for science, engineering and IT degrees.
In the United States, the Association for Psychological Science found that:
Women may be less likely to pursue careers in science and math because they have more career choices, not because they have less ability, according to a new study published in Psychological Science.
Although the gender gap in mathematics has narrowed in recent decades, with more females enrolling and performing well in math classes, females are still less likely to pursue careers in science, technology, engineering, and mathematics (STEM) than their male peers.
Researchers tend to agree that differences in math ability can’t account for the underrepresentation of women in STEM fields. So what does?
Developmental psychologist Ming-Te Wang and his colleagues at the University of Pittsburgh and University of Michigan wondered whether differences in overall patterns of math and verbal ability might play a role.
The researchers examined data from 1490 college-bound US students drawn from a national longitudinal study. The students were surveyed in 12th grade and again when they were 33 years old. The survey included data on several factors, including participants’ SAT scores, various aspects of their motivational beliefs and values, and their occupations at age 33.
Looking at students who showed high math abilities, Wang and colleagues found that those students who also had high verbal abilities — a group that contained more women than men — were less likely to have chosen a STEM occupation than those who had moderate verbal abilities.
This outcome is no surprise for those familiar with the gap between men and women in verbal and reading abilities – a gap that is strongly in favour of women
The OECD PISA tests at the age of 15 find that teenage boys have a slight advantage in maths – a few percentage points – teenage girls have a serious advantage in reading.
The OECD PISA tests at the age of 15 find that this superior verbal and reading abilities of teenage girls the equivalent of six months extra schooling. One half year’s education goes a long way towards explaining many wage gaps by gender,ethnicity in race. This six-month edge in schooling is a serious advantage when qualifying for university.
Young women choose to not pursue science, engineering and IT careers because there are other career options that allow them to use their superior verbal and reading abilities – other careers is that allow them to be more successful in life than being a scientist, an engineer or an IT geek. As the Association for Psychological Science explains in the same press release cited above:
Our study shows that it’s not lack of ability or differences in ability that orients females to pursue non-STEM careers, it’s the greater likelihood that females with high math ability also have high verbal ability,” notes Wang. “Because they’re good at both, they can consider a wide range of occupations.
To put it bluntly, science, engineering and IT degrees are for young people who lack the verbal and reading abilities to get into medicine and law. Science, engineering and IT good degrees are for those who can’t get into medicine and law. They could have been contenders if they were more articulate and well-read.
There is a gender disparity in science, engineering and IT because teenage girls find these degrees to be inferior choices – inferior choices given the set of abilities they have when considering their career options.
HT: Mark J. Perry
The day that sex discrimination died – Solomon Polachek on the gender wage gap
04 Nov 2014 1 Comment
in discrimination, gender, human capital, labour economics, occupational choice Tags: asymmetric marriage premium, Gary Becker, gender wage gap, habits and traditions, human capital, labour economics, motherhood penalty, sex discrimination, Solomon Polachek
Solomon Polachek was minding his own business back in 1975 looking for evidence to show occupational crowding and that women were pushed into low paid occupations by sex discrimination, and in particular, employer discrimination. About 60 per cent of women still work in just 10 occupations. the occupations which are female-dominated are often relatively poorly paid jobs
By chance, Polachek departed from the usual empirical strategy for estimating the male-female wage gap at that time.
Rather than include a dummy variable to estimate discrimination after various factors have been taken into account, he introduced dummy variables that took account of both gender and marital status. His results were startling.
He previously was able to explain about 35% of the wage gap using the data at hand and variables he was using.
This 35% gap dropped to 18% for single never married males and females, but his ability to explain the gender wage gap increased dramatically to over 60% for married spouse present males and females.
What more, the presence of children exacerbated the gender wage gap. Each child of less than 12 years old widened the female male pay disparity by 10%. Furthermore, large spacing intervals between children widened this gender wage disparity even further.
Subsequent research showed that marital status had the same effects on gender wage gaps in Germany, the UK, Austria, Switzerland, Sweden, Norway and Australia. Factors associated with dropping out of the labour market to care for children could explain up to 93% of the gender wage gap.
These findings are devastating to the notion that there is some sort of discrimination against women on the demand side of the labour market. As Polachek explains:
The gender wage gap for never marrieds is a mere 2.8%, compared with over 20% for marrieds. The gender wage gap for young workers is less than 5%, but about 25% for 55–64-year-old men and women.
If gender discrimination were the issue, one would need to explain why businesses pay single men and single women comparable salaries. The same applies to young men and young women.
One would need to explain why businesses discriminate against older women, but not against younger women. If corporations discriminate by gender, why are these employers paying any groups of men and women roughly equal pay?
Why is there no discrimination against young single women, but large amounts of discrimination against older married women?
… Each type of possible discrimination is inconsistent with negligible wage differences among single and younger employees compared with the large gap among married men and women (especially those with children, and even more so for those who space children widely apart).
The main drivers of the gender wage gap is simply unknown to employers such as whether the would-be recruit or employer is married, their partner is present, how many children they have, how many of these children are under 12, and how many years are there between the births of their children. These are the main drivers of the gender wage gap – all of which are factors totally unknown to employers and of no relevance to them in making a profit.
The drivers of the gender wage gap on the supply side of the labour market regarding the choices women make about having children, when they have children, and how this influences their investment in human capital, and in particular, in human capital that does not depreciate by that much because of intermittent labour force participation due to motherhood.
Occupational crowding hypotheses of the gender wage gap have the drawback of being an invisible hand explanation of social outcomes. Each individual, acting only to best secure her own rights and interests, act in such a way that the unintended outcome of a complex social interaction.
The specific unintended outcome that must arise from millions of choices of people acting in their own interest throughout their lives is occupational segregation.
The market process of the invisible hand has both a filter and and equilibrating mechanism. The filter is profits and loss to exclude through insolvency and bankruptcy those entrepreneurial choices that do not further consumer’s interests. The equilibrating mechanism – the mechanism that tells people which choices they should make – is price signals. Price signals guide individual choices towards the unintended outcome.
Those that argue that women are socialised to make particular choices such as mother were not paying attention to the 20th century and the radical social change over the course of that century, in particular in the role of women. As Gary Becker explains:
… major economic and technological changes frequently trump culture in the sense that they induce enormous changes not only in behaviour but also in beliefs.
A clear illustration of this is the huge effects of technological change and economic development on behaviour and beliefs regarding many aspects of the family.
Attitudes and behaviour regarding family size, marriage and divorce, care of elderly parents, premarital sex, men and women living together and having children without being married, and gays and lesbians have all undergone profound changes during the past 50 years.
Invariably, when countries with very different cultures experienced significant economic growth, women’s education increased greatly, and the number of children in a typical family plummeted from three or more to often much less than two.
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